All posts tagged Loans

Asia-focused private-equity firm Olympus Capital Holdings Asia has formed a structured lending business targeting mid-sized companies in the region, hiring two people to lead the business, including a former senior Barclays PLC banker.

In a statement Thursday, Hong Kong-based Olympus Capital said the new unit, OCA Capital, would target companies unable to access loans from commercial banks, or that don’t want to be diluted by private-equity investment. Loan sizes will range from $20 million to $100 million with two- to three-year maturities, and will target borrowers in Southeast Asia, India and Australia.

Regardless of the angst about the fiscal cliff late last year, Wells Fargo reported that customers continued to borrow in fourth-quarter.

Total loans at the nation’s fourth-largest bank by assets rose 4% from a year earlier, to $799.6 billion, compared to 2% growth in the third quarter. The bank said it had “double-digit annualized loan growth in commercial banking, credit card, mortgage, and retail brokerage.”

The biggest boost to the loan book continued to be mortgages. Wells Fargo has capitalized on the home refinancing surge that low interest rates have caused. Wells has been keeping more mortgages on its own books, instead of selling them to investors or other parties after underwriting them, and said the loan growth included $9.7 billion in mortgages.

Still, mortgage originations, applications and the pipeline of uncompleted applications were all down at the end of December compared to the end of September.

Some other executives, particularly Brian Moynihan of Bank of America, had warned that the fiscal cliff concerns were impacting customers in the fourth quarter.

This year, state-controlled China Development Bank has stepped into some of the biggest deals in Asia, as the policy lender goes increasingly commercial.

On Wednesday, it made what could be its biggest acquisition loan so far to a non-Chinese company: a loan aimed at financing the US$9.39 billion acquisition by Thailand’s Charoen Pokphand Group of HSBC Holdings PLC’s stake in Ping An Insurance (Group) Co. of China Ltd.

However, some recent cases suggest that having the backing of the Chinese state doesn’t mean quick financing is always guaranteed.

Real estate private equity funds managed by The Blackstone Group and Morgan Stanley have agreed to purchase a 1.8 billion Australian dollar (US$1.76 billion) portfolio of distressed property loans from Lloyd’s Banking Group’s international subsidiary BOS International, two people familiar with the matter said.

The Deutsche Bank-financed consortium outbid rivals including Macquarie Group’s Corporate and Asset Finance division, a consortium made up of Goldman Sachs, Singapore’s GIC and Brookfield Asset Management and hedge funds Elliot Associates and Pacific Alliance, one of the people said.

The great European bank deleveraging continues, but there are encouraging signs that the hit to Asia may not be so bad after all.

According to the latest data from the Bank of International Settlements, European banks’ exposure to the region continued to decline in the fourth-quarter of last year. Almost US$100 billion was pulled out of Asia. Every market in Asia saw outflows except for Indonesia, where European bank exposure increased 3% on-quarter. Taiwan was the hardest hit, with exposure in the fourth-quarter 27% lower than the previous quarter and 38% year-on-year, according to Barclays.

The transport industry has been one of the hardest hit in the tightening loan market, but Standard Chartered PLC is hoping to expand in the sector while others retrench.

Russell Beardmore, StanChart’s head of shipping finance for Northeast Asia, said the bank, which is focused on emerging markets, currently has a shipping finance portfolio of US$4.4 billion. He said the bank, which entered the market in 2007, has been keen to expand its shipping finance division, despite uncertainties surrounding the global shipping industry.

As the WSJ has reported over the last few months, European banks, who have traditionally been big lenders to corporates in Asia, have steadily scaled back their lending as they retrench to their home markets and recapitalize their balance sheets.

So it’s worth highlighting that three Asian banks made it into the syndicate of six who are in talks to lend $3 billion to Alibaba to buy back its stake in Yahoo Inc. They are Australia and New Zealand Banking Group Ltd., Singapore’s DBS Bank Ltd. and Mizuho Financial Group.

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Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.